SUCCESS IS NOT MEASURED BY STATISTICS ALONE

The important thing about a scheme such as this is the window of opportunities it can open. For any company seeking to promote the concept of sustainable development, micro-credit scheme holds a lot of advantages.

Sustainable development puts people at the centre of every development effort and at every stage. This is something micro-credit promotes. In setting up a micro-credit scheme, participatory rural appraisal is vital to determine the need of the community. It is an exercise where the community can sometimes be require to take a futuristic view of their town and suggest what method they would like their cities to imitate.

 The communities are usually required to state their developmental needs and rank or prioritise them. It is the community that identifies micro-credit as it’s greatest priority that is most prepared for it. It may be both the emphasis to state that this scheme should serve as a crutch, or a ladder for climbing out of poverty. The point really is that it is a means rather than an end. Confusing this role often leads to abysmal failure.

The next step would be to identify the groups the predominant business in the community and the quantum of loans needed. These are the essential features of the NLNG micro-credit scheme. And the company took its time to ensure that it got it right. I wrote the proposal for the scheme after which we held several meetings and review both within the company and with the consultants.

NLNG brought in Community Development Foundation (CDF), because micro-credit is not its course business. NLNG is not in a position to disburse credits or receive deposits. So, it has to look for financial intermediaries who are licensed to do these and who could administer the skills needed by the beneficiaries. By this I mean micro-credit consultants trained to administer the scheme.

The party proposing a micro-credit scheme cannot deal with amorphous groups. It needs an umbrella body that is really strong and cohesive to liase with loan seekers. Is it important to state that no scheme would be able to provide fund for all genuine loan seekers. The reason for identifying the credit need of the society is simply to provide a panoramic view of their needs and work out a percentage of this demand as seed money. Ideally, only a fraction of the demand should be provided.

This leaves majority of the loan seekers as pressure group. It should be clearly stated that disbursement of further loans would be based on performance of the first group. When this is clearly spelt out, every member of the group becomes a loan police, bringing peer pressure on beneficiaries to perform to ensure that the funds go round. Traditional institutions and strong family and clean heads may be brought in as additional safeguards.

The loan recovery rate for NLNG micro-credit scheme has been impressive. But what is even more important is the group cohesiveness it has engendered. With 82 percent returns, there is every reason to believe that it is working. It shows cohesiveness on the part of the people who are receiving and disbursing the loan. The groups have been working together and everybody has taken on the role of a loan monitor. You know your default could affect the other person.

The wonderful thing about micro-credit scheme is that it does not only strengthen the community economically; it strengthens the community politically, since it links people together. Everybody begins to watch out for the other. So, the success it has recorded is not what you can capture by statistics alone.